Tesla has raised its prices in China and the United States for the second time in less than a week, raising its cheapest car to $47,000.
Tesla CEO Elon Musk said the US electric carmaker was facing significant inflationary pressure in raw materials and logistics, made worse by supply chain disruptions following Russia’s invasion of Ukraine.
Prices of metals used in cars have soared, including aluminum that is used in the bodywork, palladium used in catalytic converters, and nickel and lithium that power electric vehicle (EV) batteries.
Founder and CEO of Tesla Motors Elon Musk speaks during a media tour of the Tesla Gigafactory, which will produce batteries for the electric carmaker, in Sparks, Nevada
A used 2020 Tesla Model 3 is available for sale on a CarMax lot on March 10, 2022 in Burbank, California. According to the Department of Labor, the price of used vehicles increased 41.2 percent since last year, despite falling 0.2 percent from last month, as inflation has hit a 40-year high
The Tesla Model 3 Rear-Wheel-Drive, its cheapest vehicle, has gone to $46,990, an increase of $2,000 after it also received a $1,000 increase just last week
The costs have raised concerns about EV economics, as legacy automakers and startups prepare to launch new cars on the back of a long semiconductor supply crunch that is still knocking production at companies including Toyota and Volkswagen.
Tesla, which has a diversified supply chain, has bought ‘millions of euros worth of aluminum’ from Russian aluminum giant Rusal, CNBC reported on Monday, citing internal documents.
Rusal’s billionaire founder Oleg Deripaska, 54, a close ally of Russian President Vladimir Putin, has been sanctioned by Britain.
Tesla increased the base price of the Model Y to $62,990, a $2,000 increase
He was among seven Russian oligarchs to be hit by brutal new UK sanctions, which were unveiled on Thursday.
Tesla bought Rusal aluminum for casting parts at its new vehicle assembly plant outside of Berlin for the Tesla Model Y, among other things, CNBC said.
Tesla received a conditional go-ahead for its $5.5 billion German gigafactory earlier this month after months of delay.
Tesla and Rusal did not immediately respond to emails seeking comment.
‘Tesla & SpaceX are seeing significant recent inflation pressure in raw materials and logistics,’ Musk tweeted on Monday, referring to his rocket company. ‘And we are not alone,’ he said.
According to the Department of Labor, the price of used vehicles increased 41.2{09e594db938380acbda72fd0ffbcd1ef1c99380160786adb3aba3c50c4545157} since last year, despite falling 0.2 percent from last month, as inflation has hit a 40-year high – with the annual inflation rate in the US accelerating to 7.5{09e594db938380acbda72fd0ffbcd1ef1c99380160786adb3aba3c50c4545157} in January of 2022.
Tesla raised prices on Tuesday for all its models in the United States by 5{09e594db938380acbda72fd0ffbcd1ef1c99380160786adb3aba3c50c4545157}-10{09e594db938380acbda72fd0ffbcd1ef1c99380160786adb3aba3c50c4545157}, its website showed.
In China, it raised prices of some China-made Model 3 and Model Y products by about 5{09e594db938380acbda72fd0ffbcd1ef1c99380160786adb3aba3c50c4545157}.
Last week, the company increased prices of its US Model Y SUVs and Model 3 Long Range sedans and some China-made Model 3 and Model Y vehicles.
The Tesla Model X is hardest hit by the price increases, rising a whole $10K to start at $114,990.
The Model S received a $5,000 price increase, hitting $99,990 with the price increase
The Model S received a $5,000 price increase, hitting $99,990, while the Model Y has risen to $62,990, a $2,000 increase.
The Tesla Model 3 has gone to $54,490, an increase of $2,500 after it also received a $1,000 increase only last week.
But despite the price increases, Tesla is seeing its order rate rise in the US, reported Electrek, with drivers flocking to electric cars as gas prices hit record levels.
The Tesla Model X is hardest hit by the price increases, going up $10,000 , rising to start at $114,990